Dipti Mittal Shah, Pune V. Income-tax Officer, Ward - 8(5), Pune

ITA 2303/PUN/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4624 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-12-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 03-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Rule of consistency; TDS; Set aside
• Section: 143(3); 40(a)(ia)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM . / ITA NO.2303/PUN/2017 / ASSESSMENT YEAR : 2013-14 MRS. DIPTI MITTAL SHAH, D-2, VISHAL GARDEN, CHAKAN, SHIKRAPUR ROAD, CHAKAN, PUNE 410 501. PAN : CZOPS0204B. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 8(5), PUNE. . / RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 6, PUNE DT.10.07 .2017 FOR THE ASSESSMENT YEAR 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS AN INDIVIDUAL STATED TO BE RETAILER IN DIFFEREN T TYPES OF MOBILE HANDSETS AND WHOLESALES AND RETAILER IN SALE OF PREPAID RECHARGE VOUCHERS AND PREPAID SIM CARDS. ASSES SEE FILED HER RETURN OF INCOME FOR A.Y. 2013-14 ON 23.09.2013 DECLA RING / DATE OF HEARING : 20.12.2018 / DATE OF PRONOUNCEMENT: 18.03.2019 2 ITA NO.2303/PUN/2017 TOTAL INCOME OF RS.6,58,110/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE A CT VIDE ORDER DT.23.12.2015 AND THE TOTAL INCOME WAS DETERMINED AT RS.15,19,530/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE C ARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.10.07.2017 (IN AP PEAL NO.PN/CIT(A)-6/ITO W.8(5)/379/2015-16) DISMISSED THE APPEA L OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD . CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE AO INVOKING THE PROVISIONS OF SEC.40(A)(IA) OF RS.8,61 ,418/-. CONSIDERING THE FACTS AND THE CIRCUMSTANCES AND NAT URE OF THE BUSINESS THE AMOUNT PAID IS NOTHING BUT REIMBURSEMEN T OF EXPENSES WHICH IS BEYOND THE SCOPE OF SEC.40(A)(IA) OF THE A CT. THE ADDITION BE QUASHED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE APPEAL ORDER OF THE CIT(A) AND ASSESSMENT ORDER OF THE AO BE SET ASIDE AS THE SAME ARE CONTRARY TO THE PROVISIONS OF THE LAW AND PRECEDENTS. 3. BOTH THE GROUNDS BEING INTER-CONNECTED ARE CONSIDER ED TOGETHER. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO ON PERUSING THE PROFIT AND LOSS ACCOUNT NOTICED THAT ASSES SEE HAD CLAIMED EXPENSES ON ACCOUNT OF COMMISSION PURCHASES AGGREGATING TO RS.8,61,418/-. ASSESSEE WAS ASKED AS TO WHETHER TDS ON THE AMOUNT OF COMMISSION PURCHASES WAS MADE A S PER SEC.194H OF THE ACT. ASSESSEE INTER-ALIA SUBMITTED THAT THE COMMISSION HAS BEEN DIRECTLY PAID BY THE IDEA CELLULAR TO THE DEALERS AND HAS ROUTED THROUGH THE ASSESSEES LEDGER ACCOUNT SINCE DEALERS FALL UNDER THE TIME OF BUSINESS OF ASSESSEE. THE AS SESSEE 3 ITA NO.2303/PUN/2017 FURTHER SUBMITTED THAT SHE IS NOT AWARE AS TO WHOM THE COMMISSION IS PAID AND HOW MUCH AMOUNT IS PAID TO WHICH DE ALER. THE SUBMISSIONS OF THE ASSESSEE WERE NOT FOUND ACCEPTAB LE TO AO. HE THEREAFTER DISALLOWED RS.8,61,418/- U/S 40(A)(IA) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO. AGGRIEVED BY THE ORD ER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 5. BEFORE ME, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES AND FURTHER SUBMITTED THAT ASSESSEE WA S ENGAGED IN THE BUSINESS OF TRADING OF SIM CARDS, RECHARGE VOUCHERS AND PREPAID VOUCHERS OF IDEA COMPANY AND OTHER COMPANIES. H E SUBMITTED THAT THE COMMISSION EXPENSES HAVE NOT BEEN IN CURRED BY THE ASSESSEE AND HAVE BEEN DIRECTLY PAID BY THE CO MPANY TO THE DEALERS AND HAD ROUTED IT THROUGH THE ASSESSEES ACCO UNT. HE SUBMITTED THAT ONLY THE TDS REFLECTED IN FORM 26AS IS THE INCOME OF ASSESSEE. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN FOLLOWING THE SAME METHOD OF ACCOUNTING IN EARLIER AND SUBSE QUENT YEARS AND THE SAME HAS BEEN ACCEPTED BY THE REVENUE . IN SUCH CIRCUMSTANCES, HE SUBMITTED THAT NO DISALLOWANCE IS CALLED FOR. LD.D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPE CT TO DISALLOWANCE U/S 40(A)(IA) OF THE ACT ON THE ALLEGED COMMISSION PAID WITHOUT DEDUCTING THE TDS ON SUCH COMMISSION PAYMEN TS. BEFORE ME, LD.A.R. HAS SUBMITTED THAT NO COMMISSION HAS BE EN 4 ITA NO.2303/PUN/2017 PAID BY THE ASSESSEE AND THE COMMISSION HAS BEEN PAID BY THE IDEA COMPANY DIRECTLY TO THE DEALERS BUT HAD ONLY ROU TED THE COMMISSION THROUGH THE ACCOUNT OF THE ASSESSEE. IT IS ALS O LD ARS SUBMISSION THAT THE AFORESAID METHOD OF ACCOUNTING HAS BE EN CONSISTENTLY FOLLOWED BY THE ASSESSEE AND NO DISALLOWANCE OF COMMISSION HAS BEEN MADE BY THE REVENUE IN EARLIER OR SUBSEQUENT YEARS. BEFORE ME, THE AFORESAID CONTENTIONS OF THE LD AR HAVE NOT BEEN CONTROVERTED BY REVENUE. IN VIEW OF T HE AFORESAID FACTS AND FOLLOWING THE PRINCIPLE OF CONSISTENCY AND MORE SO WHEN NO DISTINGUISHING FEATURE IN THE FACTS OF THE YEAR UNDER CONSIDERATION AND OF OTHER YEARS BEEN POINTED OUT BY RE VENUE, I AM OF THE VIEW THAT NO DISALLOWANCE OF EXPENSES U/S 40(A)(IA) IS CALLED FOR IN THE PRESENT CASE. I THUS DIRECT THE DELETION OF DISALLOWANCE MADE BY AO AND CONFIRMED BY CIT(A). THUS, THE GROUND OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED ON THE 18 TH DAY OF MARCH, 2019. SD/- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 18 TH MARCH, 2019. YAMINI 5 ITA NO.2303/PUN/2017 #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-6, PUNE. PR. CIT-5, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.